European bourses close lower as trade tensions mount ahead of G-7 summit

European bourses closed lower Friday as investors were worried about world trade ahead of this weekend’s G-7 meeting in Canada.

The pan-European Stoxx 600 was off by more than 0.2 percent with most sectors losing value. Autos stocks were the worst performers, down 1.17 percent, as worries mounted over the impact of a potential trade war on the sector.

The FTSE 100 index closed 0.30 percent lower.

Italy’s FTSE MIB was the worst performing index in the continent, down 1.89 percent. Traders continued to monitor political developments in the country, which has seen anti-establishment parties Five Star and Lega rise to power. The new government won a vote of confidence in parliament earlier this week.

European chipmakers slipped on a report that Apple asked suppliers to make less parts for new iPhones and is expecting to ship less units than it had placed orders for. Apple suppliers STMicroelectronics and Austria Microsys were down by 1.18 percent and 6.13 percent respectively.

Looking at individual stocks, Standard Life Aberdeen dropped more than 3.6 percent after Lloyds Banking sold its remaining stake in the business. Deutsche Bank was also off by 0.68 percent after renewed reports over a potential merger with Commerzbank.

Meanwhile, BT shares were up 0.99 percent after the company announced that CEO Gavin Patterson is leaving the firm.

On Wall Street, U.S. stocks were lower, with market sentiment offset by trade concerns with investors focused on this weekend’s summit of G-7 world leaders in Quebec.

President Donald Trump’s tariffs on steel and aluminum imports have caused upset among other G-7 members, including Canada and France.

While Trump may not mind being isolated, “we don’t mind being six, if needs be,” French President Emmanuel Macron told reporters ahead of the summit, according to Reuters. Trump accused Macron and Canadian Prime Minister Justin Trudeau via Twitter of “charging the U.S. massive tariffs and (creating) non-monetary barriers.”

Back in Europe, Thursday marked a tumultuous day for Brexit news. U.K. Prime Minister Theresa May revealed a backstop plan for the Irish border, and also said that the U.K. expects to have a permanent solution on customs arrangements after leaving the European Union implemented by the end of 2021 at the latest.

But, foreign secretary, and leave campaigner, Boris Johnson was covertly recorded Wednesday saying that there may be a Brexit “meltdown.”

German Finance Minister Olaf Scholz sought to calm views among Germans over fellow euro zone member Italy’s precarious economic situation. “I am very certain that Italy will not fail,” Scholz told broadcaster ZDF on Thursday night, as reported by Reuters.

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